With all of the books, podcasts, conferences, and gurus surrounding workplace leadership, it would seem to follow that today’s companies would a have a foolproof formula for developing highly effective managers and leaders.
Of course, a few days in any organization is all it takes to completely debunk this notion.
In fact, a recent Gallup study revealed that companies fail to choose the right candidate for a leadership position 82% of the time. In other words, businesses across industries place the wrong talent in the wrong leadership roles more than 4 times out of five.
So why are we still battling this age-old problem in information age? I have three ideas.
#1 The Tenure Trap
In the same Gallup report, U.S. companies reported that one of the most frequent reasons workers are given management positions is the amount of time they have spent at the company.
The basic assumptions behind this approach are that people usually get better at their jobs over time and loyalty should be rewarded. While these assumptions are not necessarily wrong nor should be completely excluded from an incentive structure, they are poor correlates by themselves to success in leadership and management.
Researchers Randall Beck and James Harter conclude from their extensive study that great managers share five common qualities:
They motivate every single employee to take action and engage employees with a compelling mission and vision.
They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
They create a culture of clear accountability.
They build relationships that create trust, open dialogue, and full transparency.
They make decisions based on productivity, not politics.
Does it help to have years of work experience to develop the maturity these qualities require? Absolutely.
Can someone work a lifetime and never develop any of the qualities? Absolutely.
A promotional strategy weighted heavily in favor of “time served” is lazy and ultimately detrimental to the future of any organization.
While certain industries may necessitate more focus on years of experience, simply benchmarking arbitrary milestones to achieve the next rung on the corporate ladder creates a culture of entitlement and neglects the complex nature of leadership development.
#2 Future Value vs. Present Value
The second most common reason for management appointments, according to Gallup, is success in a non-management role. This is an intuitive approach at first glance. How do you know if someone is worthy of promotion? Look at their track record, of course.
But is past performance the best way of predicting future success as a leader?
Deloitte LLP , one of the “Big Four” US consulting firms, uses a different approach called the science of potential. Rather than merely valuing an employee based on their current state, Deloitte focuses on their future value.
Will this candidate help the company adapt and grow over time? Do they have the potential to meet both current and future or unforeseen demands?
This kind of future-oriented thinking is essential to success over the long term.
Many organizations get distracted trying to find leaders to solve or manage the here and now, rather than focusing on longevity. As a result, a shift may be necessary in thinking about how companies conceptualize their leadership development programs.
A future orientation might mean unconventional leaders are needed to solve unconventional problems.
#3 A New Model
Our culture’s obsession with leadership and management can leave us feeling like we only have two options: management or stuck.
This then leads to the conclusion that the best promotions are ones with management responsibilities. But if we know that tenure and track record miss the mark 82% of the time, what are we doing wrong?
One solution is to create an environment where legitimate promotional opportunities are not merely limited to those with direct reports.
In my conversation with an engineer at one of the largest private companies in the US, the engineer noted that his company’s culture emphasized value creation above titles. Practically, this means it is not uncommon for a manager to be paid less than his/her direct report. If a team member adds more value than the manager, it is reflected in their salary.
What this does is shift the focus from hierarchy to value.
If an employee shows a proclivity for leading teams and projects, they are rewarded for the value they create. If an engineer is best suited to be a team member contributing crucial expertise, they are rewarded for the value they create. A model like this empowers employees to do their best work regardless of their position on the org chart and discourages the notion that the only valuable positions are those in leadership.
Creating a corporate culture that values great followers as much as great leaders sends a powerful message that can invigorate everyone’s performance, not just the managing elite.
So why do top talent become lousy leaders?
First, companies sometimes mistake tenure for talent.
Second, companies put too much focus on identifying leaders for the here and now, rather than emphasizing long-term potential.
Third, some top talent have no business becoming leaders in the first place! If a company’s culture values titles above performance, employees are forced to fit the round hole of management no matter how square their abilities may be.
Leadership identification and development is too important and costly to execute improperly. By keeping these three key factors in mind, organizations can transform uninformed processes into competitive advantages.